County could save $10 million with new purchasing strategy

The Mecklenburg County Board of Commissioners were presented with an outline today of changes it could make in the way it purchases goods and services that could save the County upwards of $10 million a year. The presentation was made by County Manager Harry Jones at the Board of County Commissioner’s Budget and Public Policy Workshop
“We’re going to be doing purchasing in a completely new way,” said Jones. “Taxpayers could see a $2.60 return on every dollar invested through this business case.”
The County is working with Deloitte Consulting, which will invest a portion of its fees to pay the cost to implement the business case and receive payment based on the savings achieved.
Strategic sourcing is a method of purchasing goods and services at negotiated best prices consistently across the organization. Examples include timing the purchase of certain commodities for when the prices are at the lowest during the year. Based on the County’s current purchasing practices, Deloitte estimates that this first phase of work can result in annual cost savings of up to $10 million.
Under the agreement, the County pays Deloitte $540,000 for its consulting services, which will include training County staff. Additionally, the County will pay as much as $3.4 million to Deloitte if their estimated savings are realized. As part of this initial phase, Deloitte will partner with the County staff to identify the best technology, including automated contract management and sourcing tools. Deloitte estimates improving the County’s technology hardware and software could result in additional savings of $13 to $20 million if fully implemented. A decision about approving the technology phase of the plan will be made after results of phase one are known.

“I promised in my budget message last year that we were going to redesign and reshape Mecklenburg County,” Jones said. “Emphasizing fiscal discipline and operational excellence are two of the ways we will be doing that.”

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